Sashi
U.S. prosecutors have charged Gautam Adani, a top Indian businessman, with fraud and bribery. The Brooklyn, New York, U.S. attorney’s office says Adani and others tried to pay $250 million in bribes to Indian officials. This was to get big solar power contracts from 2020 to 20231.
The goal was to get deals worth billions, showing the huge scale of the alleged corruption.
Sagar Adani, Gautam’s nephew, is also charged in this case2. The Securities and Exchange Commission has filed civil fraud charges against Adani Green Energy Ltd., a part of the Adani Group. Eight defendants are named, with executives raising $3 billion in loans and bonds based on false claims about anti-bribery policies3.
The news has shocked the Indian business world. Adani Enterprises, the main company, saw its shares drop by 22% on Thursday3. Adani Green Energy has also canceled a $600 million bond offer because of the scandal13.
Earlier this year, U.S. short-seller Hindenburg Research accused the Adani Group of fraud. This led to a big market sell-off3.
Key Takeaways
- Gautam Adani and associates charged with bribery and fraud by U.S. prosecutors
- Alleged scheme involved seeking $250 million in bribes to secure solar power contracts
- Adani’s nephew and executives from Adani Green Energy also named in the indictment
- Adani Group shares plummet following the announcement of the charges
- Adani Green Energy cancels $600 million bond offer amidst the scandal
Gautam Adani and Associates Indicted in Alleged Bribery Scheme
Indian billionaire Gautam Adani and two of his executives have been charged by US prosecutors. They are accused of a massive bribery scheme. The charges say Adani, Sagar Adani, and Vneet Jaain agreed to pay over $250 million in bribes to government officials from 2020 to 20244.
The bribes were to get solar energy contracts worth about 12 gigawatts. These contracts were expected to make $2 billion in profits45.
Prosecutors say the bribery plan started in 2020 or 20215. The indictment claims electricity distributors in five Indian states agreed to buy energy after bribes were promised5. Adani called these deals the “world’s largest” power purchase agreement5.
Prosecutors Accuse Adani of Orchestrating $250 Million Bribe to Indian Officials
Gautam Adani personally met with government officials to push the bribery scheme, the charges say. It’s alleged that about $265 million in bribes were paid or planned to be paid5. The corruption is huge, with billions of dollars invested by Wall Street investors in the last five years5.
“The charges against Gautam Adani and his associates are extremely serious and could have far-reaching consequences for the Adani Group and India’s renewable energy sector.”
Adani Green Energy Executives Also Charged in the Case
Five others, including two from another renewable energy company and three from a Canadian investor, were also charged4. Their involvement shows the bribery scheme might be bigger than thought.
| Company | Market Value Loss (Thursday) |
|---|---|
| Adani Enterprises | 23% |
| Adani Ports | 7-19% |
| Adani Total Gas | 7-19% |
| Adani Green | 7-19% |
| Adani Power | 7-19% |
| Adani Energy Solutions | 7-19% |
The indictment has hit the Adani Group hard, with a $27 billion market value loss on Thursday4. Adani Green Energy even cancelled a $600 million bond sale because of the charges4.
False Statements and Misleading Investors
The Adani Group, led by Gautam Adani, is accused of using deceit to get money from investors. Adani, the 22nd richest person in the world with a net worth of $69.8 billion64, is said to have bribed Indian officials to get energy contracts worth billions. This happened between 2020 and 20244.
US prosecutors say Adani and his team used a complex scheme to get these contracts. They claim the group bribed officials to get these deals4.
According to the indictment, Adani’s team wanted to make money by cheating investors. They raised over $3 billion in loans and bonds with false claims about their anti-bribery efforts74.
The SEC says Adani and two others broke US securities laws. They raised over $750 million, with $175 million from US investors76. Prosecutors say they lied about the bribery to get money from investors7.
Adani Group Accused of Obtaining Funds Through Deceptive Practices
Gautam Adani met with an Indian official to advance the bribery scheme, prosecutors claim. They say he planned to pay $250 million in bribes for energy contracts worth billions64. These contracts were expected to make $2 billion in profits over 20 years74.
Over $3 Billion Raised in Loans and Bonds Amidst Bribery Allegations
Despite the bribery probe, the Adani Group got over $3 billion from investors. This includes $175 million from US investors64. The group allegedly discussed bribery in secret meetings, with evidence found on phones7.
The executives also tried to block investigations by the FBI, DOJ, and SEC7.
Global Repercussions and Political Fallout
The indictment of Indian billionaire Gautam Adani by US prosecutors has shocked the global business world. It has caused a market reaction that has erased billions in value from Adani Group companies. Shares of Adani Enterprises fell 23%, and Adani Green Energy dropped 18.95%8.
The conglomerate, which includes coal, airports, cement, and media9, has denied the allegations. They call them “baseless.”
The charges have sparked a political storm in India. This is because Gautam Adani is close to Prime Minister Narendra Modi. Opposition demands for a parliamentary investigation into the Adani Group are growing. They accuse Modi of protecting Adani.
The indictment says Adani and seven others bribed officials and misled investors. It claims they raised $3 billion fraudulently8. Over $250 million in bribes were allegedly agreed for solar energy contracts, with profits over $2 billion expected after tax over 20 years9.
The fallout from the US charges has been immediate and severe. Adani’s net worth dropped by $60 billion after a report by US investment firm Hindenburg Research. Adani Group lost $150 billion in market capitalization after the report10.
Mr. Adani, once the world’s wealthiest person, now ranks 25th with a net worth of $57.6 billion8. The indictment says Adani Group’s leaders bribed Indian officials for government contracts10.
The case has also raised questions about Adani’s pledge to invest $10 billion in U.S. energy and infrastructure. He made this announcement while congratulating U.S. President-elect Donald Trump. With Indian banks exposed to around Rs 80,000 crore (£7.92bn) to the Adani Group, the fraud charges’ effects will likely spread across the Indian economy and beyond.
Conclusion
The indictment of Gautam Adani and others for a $265 million bribery scheme has shocked the world111213. They are accused of bribing officials to get solar energy contracts worth over $2 billion1213. They also raised more than $3 billion by lying to lenders and investors about their practices1213.
This has raised big concerns about honesty and following rules in the renewable energy field. The case could change how we see big companies and their leaders. It could also make them more accountable worldwide.
The news has already hurt the Adani Group, making it lose $20 billion in value in India12. Its market value is now $148 billion12. Shares in GQG Partners, a big supporter of Adani, fell 20% after the charges12.
As the case goes on, everyone will watch closely. The outcome could affect how companies act and follow rules in the future.
